The DeFi Education Fund (DEF), a crypto advocacy group that is backed by major players like a16z Crypto, Uniswap Labs, and Paradigm, has urged the U.S. Senate Banking Committee to revise its approach to regulating the $141 billion decentralized finance (DeFi) industry.
In a letter sent Friday to Senators Tim Scott, Cynthia Lummis, Bill Hagerty, and Katie Britt, the DEF highlighted that the Responsible Financial Innovation Act of 2025 (RFA) should adopt a technology-neutral stance. They have stated that it is to protect crypto developers from inappropriate regulations designed for intermediaries and ensure Americans’ rights to the self-custody of digital assets.
DEF Urges Balanced DeFi Regulation
The group has highlighted that legislation must strike a balance between combating illicit finance and fostering DeFi innovation. The DEF also called for revised guidance from the Financial Crimes Enforcement Network (FinCEN) to clarify the definition and regulations surrounding non-custodial, non-controlling software. Those involved in the Tornado Cash case should not be treated as a financial institution.
The firm warned that the bill’s current framework could create loopholes, allowing insiders to bypass securities laws, such as the Howey test, and sell tokens to the public without oversight. A16z proposed a “digital commodity” model with clear decentralization standards to better protect investors while supporting innovation.
Senate Banking Committee Embraces DeFi Feedback
The Defi Education Firm has stated on its X post that “the DeFi Education fund team submitted a response to DeFi-related questions posed by BankingGOP’s Digital Asset Market Structure RFI & recently published discussion draft of market structure legislation.”
The Senate Banking Committee welcomed the feedback, noting that it aims to refine the Digital Asset Market Clarity Act of 2025 to promote DeFi innovation while ensuring consumer protections and financial stability.
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